It was a little past midnight and a silver Porsche Cayenne was doing doughnuts across the lush fairways of the five-star golf resort Chateau Elan.
A grey-haired man wearing an open-collared shirt was behind the wheel and he’d been drinking for six hours straight.
This wasn’t a high roller on a holiday bender — he was an investment banker named Steve Bellotti, and at the time he was the head of global markets at ANZ.
Mr Bellotti was at the Hunter Valley estate to deliver the opening speech to an exclusive conference in front of some of the bank’s most important clients.
The event was being paid for by the bank, which was hosting about 150 clients of its lucrative global markets division.
Inside the Porsche, ANZ’s 43-year-old head of investor sales, Patrick O’Connor (sitting behind Mr Bellotti) was feeling more and more uncomfortable.
For more than an hour he had watched hotel staff trying to get Mr Bellotti to call it a night. But, according to Mr O’Connor, Mr Bellotti had just kept going.
“At one stage [Mr Bellotti] challenged the night manager, by saying to him: ‘Do you know who I am?'” Mr O’Connor said.
Few knew it at the time, but back in Sydney, the corporate regulator was opening what would become one of the country’s biggest-ever investigations into alleged interest-rate rigging.
It was March 2013, just months after the UK’s own interest rate scandal broke, leading to senior resignations and massive fines on both sides of the Atlantic.
ASIC was conducting its own investigation into rate-rigging in Australia and it was looking closely at ANZ’s global markets team, led by Steve Bellotti.
Background Briefing has been given documents that show ANZ’s plans to thwart this investigation by driving divisions inside the corporate regulator.
Multiple whistleblowers have given candid accounts detailing a toxic culture of ego and ruthlessness with few apparent consequences for senior figures involved.
The Wild West
By the time Steve Bellotti joined ANZ in 2010, he’d already earned a colourful reputation as a successful investment banker across the world.
In London, according to one newspaper report, he’d gotten into a trading room brawl that left him with a black eye.
He had also reportedly rented out Richard Branson’s Caribbean island at a cost of $40,000 a day for his wedding. His 40th birthday was said to have lasted three weeks.
He was successful at his job. He loved money and he was good at making it.
The 48-year-old returned to Australia and was hired to lead ANZ’s global markets team.
Trips to strip clubs were not uncommon under Bellotti’s leadership, former traders from ANZ have told the ABC.
One club became known as “The Boardroom”, because, according to one employee, you were more likely to get one-on-one time with your boss there than in the office.
Inside ANZ, Mr Bellotti instituted a strategy he called “three in three”, where he aimed to lift revenue to $3 billion.
In 2011 a new trader was hired. His name was Etienne Alexiou and he took on a senior trading role. But the clean-cut 38-year-old trader got the feeling, almost immediately, that something was very different at ANZ.
“It felt a little bit like the Wild West, it felt a little bit like a caricature of investment banking with all the excesses, but none of the substance,” he explained.
One of the first things that caught his attention was trading-floor talk about “slaughtering the rate”.
The rate in question was the BBSW, a benchmark used to set the interest on trillions of dollars in short-term loans between the banks, as well as many other corporate transactions.
“You hear it once or twice and you kind of go, ‘OK, someone’s having a bad day’, you hear quite a few times, you start to think: ‘Is this something that needs to be addressed?'” Mr Alexiou said.
It was supposed to be an independent rate, set by the market at the start of each trading day, during a five-minute window.
But the bank was accused of manipulating it and profiting from it. ANZ has always strenuously denied this.
In 2012, ASIC alleged otherwise. Recorded conversations seized by the regulator showed some ANZ traders discussing how they wanted to “ram the rate”.
“If we can f***ing jag, you know, three points on five billion, that’s half a million dollars just bang, done. People don’t understand half a million dollars. Paul’s up that for the year, you know? So we just need to f***ing do that. Especially on the f***ing rate sets,” one senior trader said.
On another call, in November 2011, another said: “We are trying to push the rate set lower today … and then higher tomorrow.”
As the investigation ramped up, ASIC began interviewing anyone who might be able to help in their investigation. The year was 2014.
One of those was Mr Alexiou. He assumed the interviews were confidential until one morning he bumped into a colleague.
“He repeated verbatim something I’d told ASIC the day before and it took me really by surprise because it was word for word,” he said.
“He said to me that ‘ASIC leaked like a sieve’.”
ANZ hired a Sydney law firm to represent its employees. The lawyers told ANZ about who was being interviewed, and when those interviews were taking place. On one occasion they did this before they told the interviewee — their client.
A spokesman for the law firm said at no time did it breach its clients’ privacy and at no time was confidential information provided to ANZ.
An ANZ spokesman said that at no stage did it seek to have its employees breach their legal confidentiality obligations.
The Luxford view
Meanwhile, senior figures at ANZ were devising a strategy to undermine ASIC’s investigator, Colin Luxford, and marginalise his views inside the regulator.
Mr Luxford believed the regulator had enough evidence around alleged rate manipulation to take the bank to court. The bank was focused on avoiding this.
In briefing notes from a May 2015 meeting, an ANZ executive explained the bank’s approach.
“It is on a knife edge at the moment. At ASIC, Colin Luxford is still the dominant view in the room,” he said.
“The objective is to shake the Luxford view with ASIC.”
According to the notes, ANZ chairman David Gonski was meeting with ASIC chairman Greg Medcraft in one-on-one meetings during this time.
“ASIC will want a bit of a win. The bank is trying to craft a solution the bank can live with that would be acceptable to ASIC,” the document states.
Eventually, in 2017 the bank did settle, admitting to “attempted unconscionable conduct”, and paid a $50 million fine.
The decision caused some disquiet inside ASIC. There was disagreement over the decision to settle. The ABC understands Mr Luxford felt like the regulator was selling out.
But in the final months before the settlement was reached, ASIC filed a 180-page court document containing excerpts of emails and other evidence.
It also contained allegations by ASIC that 38 ANZ employees had knowledge of or involvement in the alleged manipulation of the rate.
They ranged from relatively junior traders up to the bank’s senior executives, including Mr Bellotti and Shayne Elliott.
Most of the employees named in the court document accused of having knowledge of or involvement in the alleged rate manipulation were employed in the global markets division.
The allegations in this court filing were never tested at trial. The bank has always maintained it never manipulated the rate.
It did however admit to “attempted unconscionable conduct” by a small group of traders. This conduct occurred in Mr Bellotti’s backyard as he headed up the team.
We asked ANZ about whether there were any direct consequences for those involved in the BBSW scandal. It did not respond to that question.
But there were consequences for some. In 2014 seven traders were suspended pending the outcome of the investigation into rate manipulation.
Mr O’Connor, the man in the back seat of Mr Bellotti’s Porsche at Chateau Elan, noticed the list of those suspended did not include the management responsible for the division.
“I raised my concerns at the time as to the selection of those seven people. I felt as though there were certain individuals within the management structure that had responsibilities that should have been identified,” Mr O’Connor told Background Briefing.
He also remembers being called into a strange private meeting with a senior executive. The subject matter was his colleague Mr Alexiou.
“He went on then to ask me about what Etienne’s tolerance would be to potentially adverse media coverage. I had very little to offer,” he explained.
“I remember walking out thinking this is one of the weirdest meetings I’ve ever been to.”
Mr Alexiou was one of those suspended at the bank. He was eventually fired, but his termination had nothing to do with the BBSW scandal — he was instead dismissed for making lewd remarks on the bank’s internal messaging system.
He later took the bank to court, where ANZ released transcripts of his chat messages.
Background Briefing has learned those transcripts were redacted and the full versions never became public. The snippets released out of context gave the conversations very different meanings.
“I was depicted as a racist, a misogynist, a homophobe, a person of low moral character,” he says.
Mr Alexiou later sued the bank, but dropped his case.
Mr O’Connor was also brought into a meeting and terminated, accused of misusing his company credit card. The ANZ confronted him with receipts which showed he sold $18,000 worth of rare coins.
He admits he did do this, but says he was allowed to charge and then repay personal expenditure and it was approved by his manager.
“I’d maintain that it was a commonly accepted practice, it wasn’t prohibited under my employment contract, my expenses were always self-identified and reimbursed to the bank and fully approved by the bank,” he said.
Mr O’Connor is considering suing the bank.
What was galling for Mr Alexiou, Mr O’Connor and others in the division was that they were being fired while there seemed to be few consequences for more senior staff.
In their view, this was a clear double standard.
In the aftermath of the Hunter Valley incident, Mr Bellotti was given a more senior position at the bank — acting joint head of institutional and international banking, reporting directly to the chief executive.
He resigned within a year of ANZ’s BBSW scandal becoming public.
Mr Bellotti did not respond to questions about his time at ANZ and said the ABC should direct its questions to ANZ.
“I am unfortunately unable to comment,” he told the ABC.
ANZ did not answer any questions about Mr Bellotti directly but said in a statement that where evidence is provided that anyone has breached the code of conduct, it takes appropriate disciplinary action.
“This includes formal warnings, dismissal and, for more senior staff, bonuses being clawed back,” a spokesman said.
Mr Bellotti’s boss, Shayne Elliott, became chief executive just over a year after the allegations surfaced, and he was still in the top job when ANZ decided to settle with ASIC.
- Reporters: Mario Christodoulou and Elise Worthington
- Researcher: Benjamin Sveen
- Executive Producer: Alice Brennan
- Supervising Producer: Ali Russell
- Sound Engineer: Leila Shunnar/Simon Branthwaite
- Editor: Ingrid Wagner
- Digital Producer: Scott Mitchell